Wendon and Padbury (No.2)

[2018] FCCA 3116

FEDERAL CIRCUIT COURT OF AUSTRALIA

WENDON & PADBURY (No.2) [2018] FCCA 3116

Catchwords:
FAMILY LAW – Costs.

Legislation:

Family Law Act 1975, pt.VIIIAB, ss.90RD, 117(1)

Federal Circuit Court Rules 2001, div. 21

Cases cited:

Trahn & Long(No.2) [2008] FamCAFC 194

Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106
Stanford v Stanford [2012] HCA 52

Bryant v Hawkesbury Radio Communication Co-operative Society Limited [2014] NSWSC 848
Williams v Williams [2007] FamCA 313
Pierce v Pierce (1999) FLC 92-844
Omacini v Omacini (2005) FLC 93-218
Hickey v Hickey and the Attorney General for the Commonwealth of Australia (Intervenor) (2003) FLC 93-143
Davida & Davida (Costs) [2010] FMCAfam 102 Appeal

Applicant: MS WENDON

Respondent: MR PADBURY

File Number: PAC 3789 of 2016

Judgment of: Judge Harman

Hearing date: 11 September 2018

Date of Last Submission: 11 September 2018

Delivered at: Parramatta

Delivered on: 11 September 2018

REPRESENTATION

Solicitors for the Applicant: Mr Duncombe of Dignan and Hanrahan Solicitors

Solicitors for the Respondent: Ms McAnderson as agent for Camden Solicitors and Conveyancers

ORDERS

1. Dismiss the Application for stay contained within the Application in a Case filed 21 August 2018 and remove that Application from the list of cases awaiting hearing.

2. The Respondent, Mr Padbury, shall pay to the Applicant, Ms Wendon, as a contribution towards her costs incurred in the substantive proceedings concluded by the Judgment delivered 9 July 2018, a sum of $32435.60, together with the sum of $2,987 being costs with respect to today’s appearance and resistance of the Application in a Case filed 21 August, 2018, (those costs being in addition to costs as previously ordered by this Court 5 July 2017 in the sum of $17415, such that the total costs payable by the Respondent to the Applicant is $52837.60 together with interest accrued upon the earlier sum and any costs as might ultimately be incurred with respect to recovery).

3. The above costs of $32435.60 and $2,987 shall be paid by the Respondent to the Applicant by close of business 24 September 2018 (being the day prior to the listing of these proceedings before the Full Court Appeal Registrar) and in the event that payment is not made by that time then;

   (a)Interest shall accrue upon that sum or any portion thereof which remains outstanding from time to time and as determined in accordance with the Federal Circuit Court Rules 2001;

   (b)The Applicant shall be entitled to commence proceedings in a Court of competent jurisdiction for recovery of that sum together with interest and any cost of enforcement including by Application for the issue of a writ for possession of real estate.

IT IS NOTED that publication of this judgment under the pseudonym Wendon & Padbury (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA

PAC 3789 of 2016

MS WENDON

Applicant

And

MR PADBURY

Respondent

REASONS FOR JUDGMENT

1. This determination relates to discrete issues arising from the conclusion of property adjustment proceedings. Those proceedings were heard and determined under Part VIIIAB of the Family Law Act 1975. The hearing occupied some days.

2. The parties to the proceedings are Ms Wendon, the Applicant in the substantive proceedings, and Mr Padbury, the Respondent in the substantive proceedings.

3. The parties’ relationship and use of generic terminology in these proceedings is made more complex as each is an Applicant with respect to one aspect of the proceedings and, thus, correspondingly the Respondent in the other. 

4. There are two issues to determine:

   a)An Application for costs with respect to the determination of the substantive proceedings. That Application is made by Ms Wendon; and,

   b)An Application for stay of certain aspects of the substantive Orders. That Application is made by Mr Padbury.

5. I propose to deal with the Application for a stay first and then the Application for costs. The Application for costs will, no doubt, if successful, also be subject to Appeal and joined to the Appeal presently before the Full Court of the Family Court of Australia.

History and Background of Proceedings

1. It is relevant to observe that these proceedings were commenced by an Application initiating proceedings filed in August 2016. The matter is a little past its second anniversary at this point. During the course of the proceedings the matter has occupied a significant amount of Court time and resources, let alone those of the parties. 

2. The matter was initially commenced before the Family Court of Australia. The matter was fairly quickly transferred to this Court where Mr Padbury, (who I will hereinafter refer to, by reference to his role in the substantive proceedings, as the Respondent), raised an issue as to jurisdiction, alleging that a relationship, as defined by the Family Law Act 1975, had not subsisted between the parties at any time, or, in the alternative, had not subsisted for a sufficient period of time to permit this Court to be seized of jurisdiction.

3. That controversy was promptly listed for hearing from the first return date. The matter was adjourned briefly, it would seem predominantly as a consequence of the failure of the Respondent to have filed responding material, notwithstanding that service had been effected on 29 August 2016, a fact recorded by the good Registrar who conducted the Case Assessment Conference.

4. A Response was subsequently filed and, at the second Court event before this Court, 8 February 2017, hearing dates were fixed for two days, 5 and 6 July 2017. 

5. On the first day of trial, Counsel for the Respondent appeared. The Respondent did not appear. An Application for adjournment was made and refused. The Application pursuant to section 90RD of the Family Law Act 1975 proceeded and was determined on its merits by reference to a substantial volume of evidence, several hundreds of pages of exhibits included therewith.

6. Declarations were made establishing jurisdiction, declaring that a relationship had subsisted between the parties for a period commencing no earlier than 17 May 2005 and concluding no later than 15 January 2016. That is a fairly lengthy relationship. The matter was then further adjourned to permit the Respondent to file trial material. 

7. On 9 October 2017, further trial directions were made. The matter was then fixed for trial by those directions, for a two-day fixture, 26 and 27 April. The matter proceeded over those two days. At the conclusion of the proceedings, Judgment was reserved and within the Court’s benchmark period of three months, written Judgment was delivered, a Judgment of some 62 pages. That Judgment was delivered on 9 July 2018.

8. By Notice of Appeal filed 27 July 2018, the Respondent seeks to upset those Orders. The relief that is sought from the Full Court of the Family Court of Australia is:

   a)To set aside certain of the Orders made;

   b)That discretion be re-exercised by the Full Court of the Family Court of Australia “according to law”; and,

   c)That discretion be re-exercised such that the wife receives 10 per cent of the net value of certain investment properties, being a sum certain of $160,545, together with 45 per cent of the net value of what is described as “the former matrimonial property”, (although the parties have never been married), being a sum of $193,382. It is not suggested that any Order by way of superannuation splitting would be made.

9. As the Full Court of the Family Court of Australia discussed in Trahn & Long (No.2) [2008] FamCAFC 194 and Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106, a stay is not generated automatically as a consequence of a Notice of Appeal being filed. The onus is upon the person seeking a stay to establish a number of things, and a number of general principles are applicable, which might be summarised as follows:

   a)The onus to establish a proper basis for the stay is on the Applicant. However, it is not necessary to demonstrate special or exceptional circumstances;

   b)A person who has obtained a Judgment is entitled to the benefit of that Judgment.

10. It is to be observed that the Applicant has obtained two Judgments from this Court. An Order for costs was made in July 2017. It would seem that the Respondent has contumeliously disregarded that Order.  Notwithstanding the Respondent’s evidence in the substantive proceedings, that he had drawn upon a line of credit, (which still has a sum in excess of $100,000 available to be drawn down), so as to pay his own legal costs, (albeit the Respondent was unable to specifically identify those costs, nor were his lawyers able to assist him in that endeavour, but his estimate was $50-55,000), he has taken not one step towards satisfaction of the Order for costs that was made at the conclusion of the jurisdictional hearing, a sum in excess of $17,000.

11. The Applicant is entitled to the benefit of that Judgment, and has been for some little time. Enforcement proceedings can be commenced forthwith. Interest continues to accrue upon that sum which will have now substantially increased the amount payable. The Respondent purports to appeal that costs Order, albeit a year out of time and requiring leave.

12. With respect to the benefit of the second Judgment to which the Applicant is entitled, it is noteworthy that whilst the Applicant, through her Affidavit in reply to the Application for a stay, has indicated that everything required to be done to effect a splitting of superannuation, as was ordered by the Court, the superannuation fund would appear to have been contacted by the Respondent and/or his Attorneys and advised that the fund should take no action.

13. The Court is aware of that as the superannuation fund contacted my Chambers communicating that it was so, and inquiring as to whether a stay of the Order had, in fact, been granted. The superannuation fund was advised by my Associate, and appropriately so, that a stay had not, at that point – the date of inquiry – been made, although an Application for a stay was before the Court. Since then, the Application for a stay was adjourned, at the request of the Respondent. The Court is advised today, by the Applicant’s Solicitors, that the super split has been given effect to.

    c)A person who has obtained a Judgment is entitled to presume that it is correct;

    d)The mere filing of the Appeal is insufficient to grant a stay;

    e)The Court must consider the bona fides of the Applicant for the stay. In that regard, it is to be observed that one of the submissions put at the closing of evidence in the substantive proceedings was a submission to the effect that if the Court granted relief other than that sought by the Respondent, that the Court would be in error and that an Appeal would be filed.  Certainly, to that extent the Respondent has been good to his word.

    f)A stay may be granted on terms that are fair to all parties. It is to be noted that the stay that is sought by the Respondent is absolute.  The Respondent seeks that he not part with a single dollar, cash or superannuation, including fulfilment of the Order for costs that was made against him in excess of 15 months ago, and which has not, until the Notice of Appeal filed in July 2018, significantly out of time and without Any application for leave, made any attempt to satisfy. The Court is not invited to make any Order for interim payment, not even for the Respondent to pay to the Applicant the sums certain that he suggests should be the outcome of the proceedings, or the payment of the costs Order.

    g)A weighting of the risk that an Appeal may be rendered nugatory if not granted, this being a substantial factor. As observed above, the superannuation split has already occurred;

    h)Some preliminary assessment of the strength of the proposed Appeal, specifically whether the Applicant has an arguable case.  It is made clear by the above authorities that it is not a first instance trial Judge’s role, in dealing with an Application for stay of that Judge’s own Orders, to determine the Appeal, nor second guess what the Full Court of the Family Court of Australia might do in disposing of the Appeal. However, that preliminary consideration is necessary.

    i)The desirability of limiting frequency of change of children’s living arrangements. This is clearly not relevant in this case;

    j)The period of time in which the Appeal will be heard. Strident steps have been taken by the Appeal division to expedite the hearing of all Appeals, and it is probable – although not known – as the Respondent has not sought to communicate it to the Court, other than to advise a listing date before the Appeals Registrar, 25 September 2018, (for settling of Appeal books), that the Appeal will be heard, if not this year, early next year.

14. The eleventh consideration generally established by the above authorities again relates to parenting and, thus, is not relevant. I will deal with each of the above factors to the extent that they require address.

15. The onus to establish a proper basis for Appeal is upon the Applicant.  That which is filed in support of the Application for a stay is an Affidavit by the Respondent’s Solicitors of six paragraphs. It essentially recites the Orders that are made. It makes clear what the Respondent will seek on Appeal, and at paragraph 5 – the only paragraph of any relevance to the above criteria – states, “Your Honours,(sic) [the possessive apostrophe being absent] has made orders that that (sic) if carried out in accordance with your Honours, (sic) time schedule, would defeat the purpose of the appeal by dispersing, selling, and otherwise dealing with funds and property, the distribution of which are the subject and purpose of the appeal.”

16. There would not appear to be any further attempt to engage with, or address, the relevant factors that are set out in the relevant authorities. 

17. It is noteworthy to observe that the Application for stay was filed on 21 August 2018. The Application was listed for determination on 28 August 2018. The matter was listed that day at the instigation of the Applicant’s legal representatives who had sought costs. The Applicant had complied with Orders made with respect to that required of them in that regard.  

18. The date of 28 August 2018 was varied by Order made in Chambers. That Order was made by consent to accommodate the availability of Counsel for the Respondent. Notwithstanding that circumstance, Counsel has not appeared. Instead, an agent has been sent. It is not criticism of the agent. The agent has done all that is within her power, valiantly so, to present the submissions that she was requested to put to the Court. She has, in the vernacular, been thrown under the bus by the Respondent’s principal Solicitors, through an absence of proper instruction, including an absence of any suggestion that the issue of costs would be dealt with. Thus, no submissions could effectively be put in that regard other than to draw the Court’s attention, as has been done, to the general rule created by section 117(1) of the Act that each party will bear his or her own costs.

19. Again, and for the sake of repetition, if nothing else, it is not the agent’s fault that they are not properly instructed. It is perhaps discourteous to the Court and the agent, but not her fault.

20. A person who has obtained a Judgment is entitled to the benefit of that Judgment. The Applicant wishes to retain the benefit of the Judgments, plural, that she has obtained from this Court.

21. A person who has obtained a Judgment is entitled to presume that it is correct. One can only assume that this is the Applicant’s position and that the Appeal will be resisted.

22. The mere filing of the Appeal is insufficient to grant a stay. However, that would appear to be assumed by that which is put, a paucity of evidence or submission.

Bona fides of the Applicant

1. It is difficult to accept the bona fides of the Applicant, other than, again, to observe that at the conclusion of the substantive case the submission was put, not in veiled terms but fairly clear terms, that if Orders were made substantially beyond that which the Respondent proposed, that an Appeal would be filed.

2. The resistance by the Respondent of any plea for relief by the Applicant has been total. There has been significant delay in the Respondent engaging in the proceedings, it taking a matter of months before the Respondent filed any document in the case. The Respondent then agitated for a jurisdictional hearing and obtained a two-day listing before this Court, which he then failed to attend or engage with, leaving his Counsel on that occasion in a similar position as the agent instructed today, thrown under the bus.

3. The evidence led in relation to the relationship between these parties – indeed the evidence of the Respondent - makes clear that this Court always had jurisdiction. One can only assume that the jurisdictional issue was raised other than with a proper bona fides of purpose. That is spoken to also by the manifest inadequacy of the Respondent’s disclosure at any point in these proceedings. As is made clear in the substantive Judgment delivered in July 2018, disclosure, or absence thereof, being a very significant issue in this case.

4. Indeed, the most significant documents in the case were tax returns for the Respondent relating to the very investment properties which are at the heart of his substantive case and Appeal, and which were produced on the second day of hearing, nearly two years after the litigation commenced.

5. The Applicant had been bombarded with documents by way of purported disclosure, the vast majority of which were irrelevant. I have real concerns as to the bona fides of the Applicant on those bases. The Respondent’s bona fides are also spoken to by the very grounds of the Notice of Appeal. 

6. The Notice of Appeal raises 15 grounds. Most are in broad and general terms, suggesting, for example, “The learned trial judge erred and his Honour’s discretion miscarried by acting on a wrong principle.” It is not suggested what principle was wrong, or what principle should have been used in substitution, merely that a “wrong principle” was applied.  The gravamen of the Appeal is that the Court had regard and recourse to the Respondent’s superannuation entitlements. Those superannuation entitlements were a significant portion of what might be described as the “pool of property”, or, more correctly by reference to the High Court of Australia’s decision in Stanford v Stanford [2012] HCA 52, the present legal and equitable interests in property of these parties.

7. The Respondent’s superannuation interest had a value as fixed and determined by the (Super Fund), subject to the specific regulations which apply as to the valuation of the fund, to be worth $1,341,059. The Respondent seeks to exclude the entirety of that fund from the pool, which would reduce the value of the pool by that amount, and thus from net assets, including superannuation, of $3,546,084, to an amount a little over $2 million.

8. Even if that were to occur, it is to be noted that the Respondent’s position is that, if he is successful on the Appeal, that the wife should receive from that lesser amount something a little over 10 per cent of the total pool, being the amounts already referred to above. To the extent that one of the grounds of Appeal is that the Orders that were ultimately made by this Court were “plainly unreasonable and unjust”, one might well apply the same language with respect to the Respondent’s position, being the very position, he agitated for the nearly two years of this litigation.

9. Secondly, the Respondent agitates that the Court has misdirected itself as regards the Respondent’s initial contributions. It is germane to observe that there is, and was, never any factual dispute in these proceedings that four parcels of real estate – tenanted parcels of real estate – and encumbered by mortgages, were brought into the relationship by the Respondent.

1. The Applicant, to her credit, did not seek to cavil with that proposition at any point in the proceedings. The real issue relating to those properties is connected with disclosure, and the absence of adequate, or appropriate disclosure, if disclosure at all, on the Respondent’s part, with respect to those properties.

2. The Respondent made certain assertions, and continues to agitate those assertions on Appeal, that the Applicant made little or no contribution to those properties, directly, indirectly, or in any other fashion, financially or otherwise. That position of the Respondent would now appear to be somewhat tempered by the Respondent suggesting that he made substantial contributions, not only through introduction of the property, but by servicing all debts of those properties prior to and post the relationship.

3. Assuming that might be a concession, it was certainly not one made at the substantive hearing. It must be remembered that the Respondent agitated at all times that the properties were self-funding, made no losses, indeed made profits that benefited both parties, and yet upon production of his tax returns, that which is recited at paragraph 149 of the substantive Judgment, it was revealed that the properties had, during the period 2005 to 2013 - a portion of the relationship between these parties - made losses of nearly $400,000, which were paid from funds of one or both of the parties. A finding of fact had been made that those funds came from the funds of the parties, plural.

4. There was no controversy whatsoever that the Applicant’s income throughout the relationship was paid into either the Respondent’s account, or a line of credit account in the Respondent’s name, from which those losses were paid. 

5. What is really argued by the Respondent is that the Court’s discretion has miscarried by favouring and finding the Applicant more credible than the Respondent. They are matters which, by reference to relevant Full Court authority, and in due course the Full Court will consider those matters, may have less prospect of success than the broad and general complaint as to mis-application of principle without any ability to identify what principle was mis-applied.

6. The substantive judgment recites a page and a half of relevant Full Court of the Family Court of Australia and High Court of Australia authority relating to those matters. Presumably, one or more of those suggested principles was either identified, but not applied, mis-applied, or was outdated. However, the Notice of Appeal does not identify that.  Accordingly, I again have some concern as to the bona fides of the Respondent. 

7. A number of complaints in the Notice of Appeal are about findings of fact and acceptance of the Applicant’s evidence over the Respondent’s.  I am satisfied any such findings are fully and properly explained within the substantive Judgment, and it may well cause the Respondent some difficulty on Appeal, although that is, of course, a matter for the Respondent and the Full Court of the Family Court of Australia.

8. Three final matters require some specific address. At point 13 of the Appeal it is alleged that the Appellant was not provided procedural fairness in relation to the costs Order made on 5 July 2017. The costs Order was made at an interlocutory hearing, which was fixed many months in advance, and which the Respondent not only failed to attend but failed to engage with in any way, including by the Respondent having filed no material.

9. The Respondent was represented by Counsel. There has been a period now of 14 months since the Order was made, and until the filing of the Notice of Appeal, 27 July 2018, at least 11 months out of time, no challenge was made to the Order. The Respondent simply ignored it, as though it had never been made, even though he acknowledged during cross‑examination that he was fully aware of it.

10. It may be that the Respondent simply did not agree with the costs Order, very much as he does not agree with the Orders ultimately made by this Court, again reflecting, I am satisfied, on his bona fides or lack thereof. 

11. Secondly, it is alleged that proper reasons were not provided. That will, of course, be a matter for the Full Court of the Family Court of Australia, but a detailed, footnoted, substantive Judgment of 62 pages was delivered with respect to the determination of the property adjustment claim, and a Judgment of not dissimilar length in relation to the section 90RD claim, although that Judgement is not the challenge on Appeal. There is nothing to indicate how the reasons are suggested to be inadequate.

12. Lastly, it is suggested that, “The learned trial judge was biased.” It is to be observed that there was no Application for recusal at any point in the hearing, and indeed the issue was never raised, not even in closing submissions. It is certainly not agitated as a basis for the stay. I have real concerns as to the Respondent’s bona fides in raising such complaint.

13. The stay may be granted on terms. As already observed, the Respondent does not propose that. The Respondent proposes that he retain possession of a net asset pool with a value in excess of three and a half million dollars pending determination of the Appeal, and if and when the Full Court of the Family Court of Australia makes an Order requiring him to part with any portion thereof, that he will do so.

14. The only asset from the 16 set out within the balance sheet contained within the Judgment (at pages 29 and 30) which is retained by the Applicant, is a motor vehicle with a value of $7,000. That is the only asset that she has walked away from this relationship with, her complaint including that she has not even received the majority of her clothing and personal things, that proposition having been agreed by the Respondent during cross-examination.

15. One would think that if there was bona fides in prosecuting the Appeal, that some attempt might have been made by the Respondent to either negotiate or put to this Court a proposal for a stay on terms. That is particularly so when the Respondent clearly has available to him drawable credit in the nature of the line of credit, together with an income, in excess of the Applicant’s income from wages and salary, derived from his superannuation pension. Yet no such proposal is put.  That is particularly germane in informing my view of the lack of bona fides of the Respondent. 

16. I must balance, as a most substantial factor, the risk that the Appeal will be rendered nugatory. There is some potential that that might be so, in that if funds were paid by the Respondent as required by the Orders then the Applicant is entitled to do as she wishes with those funds. 

17. If funds were paid, and were not repaid, or were not able to be repaid, the Appeal would be rendered nugatory. If the Orders were enforced as to the time period for payment of a sum certain, that time having now passed, compelling the sale of certain parcels of real estate by the Applicant as a trustee, then, again, the Appeal might be rendered nugatory.

18. The Respondent is required to pay a sum of $635,000, 30 per cent of the non-superannuation assets, together with the costs Order, and failing payment of which by 17 August identified properties are to be sold. There is no evidence to suggest that the Respondent has taken a single step towards complying with the Order, other than to file the Appeal, and belatedly so. Indeed, the Appeal was filed after the date fixed for payment of the sum certain.

19. I have already commented upon the issues that have arisen with respect to the superannuation splitting Order. However, there is some substance – although not argued with any particular efficiency in the Respondent’s case – to the proposition that the Appeal might be rendered nugatory if the super split were to occur. However, that split has occurred.

20. Preliminary assessment of the proposed Appeal is already addressed above. The Appeal relies upon attacks upon discretion and findings of fact. It will be a matter for the Full Court of the Family Court of Australia as to whether those grounds are successful, but the heads of Appeal as framed, particularly the last three, specifically commented upon, would not appear to have any basis at all. 

21. The Appeal will be heard quickly, as already observed.

22. In all of those circumstances, I am not satisfied that the Application for a stay is made out. The Court is left, essentially, to infer that the Appeal may be rendered nugatory.  However, that must be balanced against the bona fides of the Respondent, the prospects with respect to the grounds of Appeal as they are presently framed, albeit a preliminary assessment rather than a determination, and, importantly, the reality that it is the onus of the Respondent to prove his case, not to simply assert the Appeal will be rendered nugatory. That is all the more so when the Respondent’s demonstrated inaction would suggest that he will do nothing towards complying with the Orders, even if a stay is not granted. Thus, it will be up to the Applicant to determine whether she wishes, subject to the timeliness of the hearing of the Appeal – which I have no doubt will be incredibly efficient – to take enforcement action, or simply to allow interest to accrue. Thus, in due course, the Application for a stay will be dismissed.

23. The issue for costs is addressed, as the parties concede, by reference to section 117 of the Act. Subsection (1) creates what is often referred to as the general rule:  each party shall bear his or her own costs.  That is, of course, subject to the broad discretion in subsection (2) providing that the Court may, in an appropriate circumstance – appropriateness being determined by reference to both a justified circumstance or circumstances, and justice in the particular case – make an Order for costs.

24. The Court must consider, in exercising that discretion, each of the factors in subsection (2A). Those factors are prescriptive, though non‑exhaustive. 

25. Subsections (3), (4), (4)(a) and (5) are not relevant, dealing as they do with Applications by or involving Independent Children's Lawyers, or child welfare agencies.

26. A schedule of costs sought, prepared in accordance with the Federal Circuit Court scale, set out in schedule 1, and incorporated by division 21 of the Federal Circuit Court Rules 2001, is filed by the Applicant.  That document shall be, for today’s purposes, exhibit A. Exhibit A seeks amounts in relation to initiating or opposing an Application.  There have, in fact, been two Applications heard and determined by this Court, and, thus, I am satisfied it is appropriate that caution be exercised in exercising discretion.

27. Exhibit A seeks an allowance for preparation for the hearing of two days. It seeks costs for the hearing itself, together with an extensive list of disbursements. I will come to those in due course. 

28. In dealing with each of the factors in subsection (2), the following can be observed.

The financial circumstances of each of the parties

1. Having heard and determined now both an interlocutory Application and the substantive proceedings, the Court is well placed to understand the financial circumstances of these parties. As already observed, there is a net asset pool, or present legal and equitable interests in property, including superannuation, of $3,546,084, of which all but $7,000 is held by the Respondent.

2. If superannuation is removed therefrom there are still net assets of $2,148,700, of which all but $7,000 is held and controlled by the Respondent. That includes the income earnt from the superannuation interest already touched upon, together with all income earnt from the four investment properties, as well as possession of the former matrimonial home, as the Respondent has described it, at Property A. That control of assets is to the exclusion of the Applicant who has a rental cost incurred, and has had such a cost incurred since the termination of this relationship.

3. The Respondent is in a vastly superior financial position, verging upon, if not, in fact, at the point of what might be described, analogously from corporations’ law, as an oppression of a minor shareholder. The Applicant has simply been excluded from all assets and income generated thereby without any recourse or accounting. That certainly substantially interferes in the Applicant’s indefeasible title with respect to the Property A property, although that is not to suggest the Respondent has any obligation to pay rent or any other occupation fee.

4. There are clearly funds available to the Respondent from lines of credit, from which he might have made some proposal, if not partial payment, at least to the extent of that which he has sought and pressed for two years and now seeks on Appeal. But he has not done so. He has not even taken any reasonable step towards paying the costs Order made against him notwithstanding that during cross‑examination, the Respondent was clear that he was aware of and had no intention of paying the Order.

5. The financial circumstances of the parties would not, of itself, be a justifying circumstance for an Order for costs, or at least in most cases.  In this case it lends some support to other justifying circumstances, but the financial disparity of financial circumstances between the parties most assuredly establishes justice.

Whether a party is in receipt of Legal Aid

1. Clearly neither is.

The conduct of the parties with respect to the proceedings

1. The substantive Judgment, delivered in July 2018, devotes a significant portion to a discussion of the conduct of the Respondent in these proceedings, subject to the above comments in addition.

2. The Respondent’s approach towards disclosure, (as well as the approach of those retained by the Respondent from time to time), fell extremely well short of that required of any litigant in proceedings before any civil Court. Indeed, it was that lack of disclosure that not only led to the two‑day hearing and the need to vigorously cross-examine, but precluded any reasonable prospect of settlement of the case.

3. It is impossible for parties to safely resolve their proceedings without symmetry of information. That has some relevance, I am satisfied, whether under subsection (c) or subsection (g), as other matters the Court considers relevant, by reference to authorities such as Bryant v Hawkesbury Radio Communication Co-operative Society Limited [2014] NSWSC 848, for example. Even if the Respondent felt that he had an overwhelming case, such as Mr Bryant in the above litigation, it is still incumbent upon him to comply not only with a reasonable use of Court resources, which had been very much inappropriately used by the Respondent, particularly in generating the need for a jurisdictional hearing which he then did not attend and which his subsequent evidence made clear was unnecessary, but he has failed to engage in his obligations as a litigant in relation to disclosure, again as commented upon extensively in the substantive Judgment.

4. The conduct of the Respondent has been delaying, obfuscating, and, without intending any disrespect or sarcasm by adopting the same terminology as his Notice of Appeal, based upon wrong principle. The Respondent’s entire case was conducted on the basis that the property that he introduced was his, and should remain his, and should not have any significant account taken of it. That is dramatically inconsistent with Full Court of the Family Court of Australia authorities such as Williams & Williams [2007] FamCA 313, Pierce & Pierce (1991) FLC 92-844, Omacini & Omacini (2005) FLC 93-218, et al.

5. Secondly, the Respondent’s case is, and remains, that the entirety of his superannuation interest - increased, but not created by, his having been hurt on duty as a (occupation omitted) – should be excluded from consideration. How that accords with authorities such as Hickey v Hickey and the Attorney General for the Commonwealth of Australia (Intervenor) (2003) FLC 93-143 is completely unclear and will be a matter for the Respondent to demonstrate to the Full Court of the Family Court of Australia.

6. The Respondent’s position was not successfully prosecuted in the substantive proceedings nor, in fact, was any reasonable authority offered to support the Respondent’s contentions. I am satisfied that the conduct of the Respondent in these proceedings, especially in the substantive proceedings, would be a justifying circumstance for an Order for costs by and of itself. 

Where the proceedings were necessitated by a failure to comply with previous orders

1. The substantive proceedings were not so necessitated, although clearly, again, perhaps properly considering under subsection (g), the Respondent has contumeliously disregarded the Order for costs made against him, and taken no step to pay it, and made clear that he does not intend to do so.

2. On that basis, and returning to the issue of his Appeal being rendered nugatory, he has in fact created the circumstance which potentially might cause that by itself. The Applicant is entitled to commence recovery proceedings forthwith for that sum. She may well be advised not to in the circumstances whereby, even though leave is required to Appeal against the Order, and none is sought, that it might be preferable for the Appeal to first be determined. 

3. But the Applicant is entitled to seek to secure payment of that sum, plus interest, plus costs, against real estate, and to obtain – having already obtained a Judgment, a writ for the seizure and sale of real estate.

4. Similarly, the Respondent’s delay in prosecuting his stay Application has meant that the super splitting Order has been put into effect.

Whether a party has been wholly unsuccessful in the proceedings?

1. It is fairly submitted that the Applicant has not been wholly successful, although she has been substantially successful.

2. If one has regard, however, to the Full Court of the Family Court of Australia’s decision in Davida & Davida (Costs) [2010] FMCAfam102 Appeal, the following is found:

   The other justifying circumstance is the husband’s relative success.  True it is the relevant paragraph in section 117(2A) refers to a party being “wholly unsuccessful”, but I think it is fair to say that the practice has been to look at what one might term the relative merits of success between the parties, even if necessary doing that under the last matter mentioned section 117(2A), being any “other” matters.

3. Both success and absence of success are relevant in this case, even without considering offers, the next consideration. 

4. The Applicant’s case has always been that she seeks a 35/65 per cent division. She obtained a 30/70 per cent division. She was substantially successful. The Respondent’s position has been throughout that the Applicant should not receive more than approximately 10 per cent of the non-superannuation asset pool, representing either nothing with respect to the four investment properties of which the Respondent is the sole registered proprietor, and a modest portion of the property of which the parties are the joint registered proprietors.

5. It has always been the Respondent’s position that his superannuation, in its totality, should be excluded from consideration. To that extent the Respondent has been wholly unsuccessful. He has not persuaded this Court of anything that he has alleged, either the above matters or the absence of jurisdiction (although that has already been addressed in the prior costs Order and thus not further taken into account as regards any quantum of costs). The Respondent generated a jurisdictional dispute that was entirely unnecessary, even on his own evidence. That, again, supports justification and justice for an Order for costs. 

Whether a party has made an offer?

1. There is no written offer, but the Act does not require that the offer be in writing. It is put to the Court, and I accept, that a round-table conference occurred prior to the jurisdictional hearing in these proceedings, that jurisdictional hearing having occurred before jurisdiction was established, and thus prior to the commencement of these proceedings, as it were, as the Court could not advance the substantive claim for property adjustment until section 90RD declarations were made.

1. It is submitted that at the round-table conference an offer of settlement had been placed on the table, as it were, that the Applicant would take a 30/70 per cent division, exactly what she obtained at trial. I am satisfied that the Court must take into account that offer of settlement.  Indeed, it must flow most clearly from any authority of this Court, the Full Court of the Family Court of Australia, or any other Court of appellate jurisdiction.

2. The offer of settlement must be given full and proper consideration. To fail to do so would itself be apellable error. That would generate, yet again, a justification, as well as also speaking to the issue of justice. 

3. In those circumstances, I am satisfied that the Application for costs is made out.

4. Indemnity costs are not sought. That which is sought in exhibit A falls well short of indemnity costs, both parties having, by the conclusion of the substantive proceedings, indicated the costs incurred to date. The professional costs that are sought in accordance with stages 1, 5 and 6 are entirely reasonable and are a fraction of the cost, in fact, incurred.

5. There are then significant disbursements sought. The Federal Circuit Court Schedule of Costs permits the awarding of disbursements. There are specific aspects of disbursements referred to within those rules, particularly paragraph 14, Court fees and other payments that have been reasonably incurred, and paragraph 15, photocopying, together with paragraph 16, agent’s fees and travel costs. Thus, it is an issue of whether the various disbursements referred to are reasonably incurred.

6. The disbursements referred to largely relate to undertaking Real Property Act searches through the LPI, conduct money for subpoena, those subpoena in themselves made necessary by the Respondent’s poor, if not completely inadequate, disclosure, fees paid for form 6 responses from trustees, preparation of valuations by trustees, and the like. I am satisfied all of those amounts are entirely appropriate and reasonably incurred.

7. Perhaps the only issue of controversy with respect to disbursements is the inclusion as a disbursement of Counsel’s fees for the two-day hearing. I am conscious of a number of authorities, particularly of my brother Jarrett, in relation to Counsel’s fees and whether they might properly be described as a disbursement. 

8. On the basis that the costs which are sought under schedule 1 are professional costs, and are the costs of the Solicitor retained by the Applicant, I am satisfied that Counsel’s fees can reasonably be included as a disbursement. The principal legal obligation for payment of those fees rests with the legal practitioner, not the client. I am satisfied, and do not doubt, that the retention of Counsel was authorised on the instructions of the Applicant and reasonable. On that basis Counsel’s fees would meet the terms and conditions of a disbursement properly incurred in taxation in any other Court.

9. I am satisfied that the amounts that are sought by the Applicant are fair and reasonable, properly incurred and in fact incurred. For those reasons an Order for costs will also be made as sought, and Orders are thus made as follows.

10. In addition to the above, there are also costs incurred with respect to today’s appearance. Costs are sought on the basis of the determination of an interim or interlocutory Application and half-day appearance, the matter now dealt with at approximately 11 am when listed 9.30 am.  The costs which would flow by reference to schedule 1 are item 3, $1867, interim or summary hearing as a discrete event, together with daily hearing fee being item 13, half-day, $1,120.

11. For the same reasons as above, I am satisfied that these amounts are fair, appropriate and properly incurred, and that the costs are justified and just. The Respondent has been wholly unsuccessful in his Application. The Applicant has been wholly successful in her Application. Accordingly, there would be injustice if costs were not awarded.

12. For the purpose of the costs determination, I am satisfied that costs with respect to the hearing of the Application, if the Application is brought and successfully prosecuted, should follow the event and be costs of the cause.

13. Accordingly, that would be an additional amount of $2,987, and a further Order is made on the same terms as the above one for the $32,000-odd, so that both sums are combined and are payable by 4 pm on 24 September. So that would make the total cost payable, from that ordered today and at the conclusion of the jurisdictional hearing, an amount of $52,837.60.

I certify that the preceding ninety-nine (99) paragraphs are a true copy of the reasons for judgment of Judge Harman

Date: 1 November 2018